New Financial Restrictions on Hong Kong May Be Warranted, Senate Panel Hears
The U.S. should consider designating specific financial institutions, sets of transactions or types of accounts in Hong Kong as primary money laundering concerns to address the Chinese territory's recent crackdown on freedom and its role in aiding sanctions evasion by rogue regimes, a researcher told the Senate Foreign Relations Subcommittee on Human Rights July 22.
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Such targeted designations, which would authorize new financial restrictions, would be easier to justify than one against all of Hong Kong and would still cause companies to question whether the territory remains a good place to do business, said Olivia Enos, senior fellow at the Hudson Institute. Enos urged Congress to pass legislation to encourage the executive branch to weigh the targeted designations.
“Congress can hold the administration’s feet to the fire by putting them on a specific timeline and reporting requirement asking them to investigate whether certain entities or sets of transactions qualify as a primary money laundering concern,” Enos testified. “It speaks to the fact that rule of law is undermined and that it’s not business as usual.”
Sens. John Curtis, R-Utah, and Jeff Merkley, D-Ore., both members of the subcommittee, introduced a bill in April that would direct the Treasury Department to determine whether Hong Kong is a jurisdiction of primary money laundering concern (see 2504080060). They cited Hong Kong’s role in export control and sanctions evasion.
Enos also called for sanctioning individuals and entities that implement, enforce, prosecute and rule on Hong Kong's 2020 national security law and 2024 Article 23 legislation, both of which have enabled increased repression.
The U.S. also should “make full use of preexisting financial sanctions authorities to target [Chinese Communist Party] officials responsible for other human rights violations in China,” Enos said. “The Treasury Department should issue specific tranches of sanctions at key diplomatic moments to advocate for political prisoner release, in particular.”